Autumn Statement: Bristol business reaction

November 25, 2015

Bristol business experts have given a broadly upbeat reaction to this week’s Autumn Statement and Spending Review.

James Durie, pictured below, chief executive of Bristol Chamber of Commerce & Initiative – part of Business West – said it contained some positive news for the city-region.

“Once again the ‘builder’ Chancellor has used the tools at his disposal to create a statement that the majority of businesses will applaud,” he said.

“The statement, widely predicted as being gloomy, was surprisingly upbeat in business terms as he started by citing the South West as a well performing region with the lowest unemployment rate in the country.

“There were also several announcements to spark local interest. He delivered an extension of the Bristol Temple Meads and Bath and Somer Valley Enterprise Zones which we, along with the West of England LEP, have been calling for. This will stimulate growth in the region whilst also boosting the investment stream from retained business rates.”

On infrastructure, he said increased funding, including funding for low-emission vehicles, was another step in the right direction. “Businesses can only operate as well as the environment they are in, and the announcement that capital funding for transport projects will rise by 50%, to a total of £61bn, will be applauded,” he said.

There was less to cheer on skills – a priority in the West of England. High youth unemployment and business skills gaps were a cause for embarrassment, said Mr Durie, and a package of reform for education, along with details of the Apprenticeship Levy would be welcomed by businesses, although there were reservations as to how this would work in practice.

“It was also good to see as much political emphasis put on fixing the housing crisis, as our region suffers from increasingly high housing costs compared to other areas in the country,” said Mr Durie,

“The doubling of the housing budget was welcome news, but the overwhelming emphasis on home ownership may be a mixed blessing. On the one hand, higher-skilled workers are likely to want to own their own home, so making this easier should make them more likely to stay in our region.

“However the lack of lower-cost rented options may start to hit the lower part of our labour market. It is also worrying to see that the Office of Budget Responsibility is still predicting that house price rises will continue to outstrip earnings.”

The increased cash for the national Arts Council would strengthen the link between culture and economic growth, which has been long recognised in Bristol.

However, Mr Durie said there were two “significant” omissions in the Chancellor’s speech. “We were pleased that there was no mention of the devolution of Air Passenger Duty to Wales, which had been rumoured as being seriously considered.

“This move would have potentially hurt Bristol Airport and created an unfair playing field across the Welsh border.”

The second omission was no mention of a devolution deal for the West of England, while the Northern Powerhouse received a raft of mentions and spending pledges.

“Bristol and the West of England is now one of the few English city regions that does not have its own devolution deal. We hope that the negotiations currently underway progress quickly so that our city region also has the chance to take hold of the powers and funding that are being offered to others.”

Rebecca Tregarthen, pictured above, chairman of IoD Bristol, welcomed the devolution of control of local taxes to local councils.

“We see it as an important fillip for the region and a potential catalyst for smoothing out urban imbalance,” she said.

“However, the potential of a 2% rise in council tax will not go down well with residents. The Apprenticeship Levy will be a hefty hit on our larger businesses but the repercussions for the region should still be positive with the number of SMEs to benefit – relevant for 2016 as George Ferguson, Mayor of Bristol, announced 2016 as Bristol’s Year of Learning.”

Malcolm Emery, a partner at law firm Thrings – which has an office in Bristol – said the Chancellor, in what was effectively his fourth Budget speech in less than 12 months, had taken the opportunity to announce a series of vote-winning giveaways to businesses and individuals.

Mr Emery, pictured right, who is a dual-qualified chartered tax adviser and solicitor, added that Mr Osborne still appeared to be in austerity mode – “and with a large black hole to fill it is arguably with good reason”.

He added: “The rise in the basic State pension, protection of police budgets and the increase in financial support for education will have been welcomed by many people in the UK. However it is the Government’s decision to scrap proposed changes to tax credits that will inevitably attract the headlines, with some of the required £4.4bn being met by an increase in Stamp Duty land tax payable on buy-to-let properties.

“Many businesses will welcome the abolition of uniform business rates, the setting aside of £12bn for a Local Growth Fund and the creation of 26 new or extended enterprise zones. Meanwhile the introduction of an apprenticeship levy – set at 0.5% of the employer’s wage bill – will aim to deliver three million apprenticeship starts by 2020, with each employer receiving a £15,000 allowance to offset against their levy payment.

“Little was offered by the Chancellor on further tax cuts, although this is perhaps not surprising as many are still working through the reforms he proposed in his summer Budget to non-domiciled individuals living in the UK and the taxation of dividend income. Both reforms will impact on the economy, particularly for those families who use companies for business and wealth preservation purposes.

“Mr Osborne also talked about the digital age and its ability to facilitate costs savings within HMRC by creating individual accounts for each and every taxpayer. Earmarking an additional £800m to tackle tax evasion highlights the Government’s commitment in this area, with the new measures forming part of his plans to ensure the UK has the ‘most digitally advanced’ tax system.”


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